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Oct. 4 — Corporate money in U.S. election campaigns—legalized by the 2010 Supreme Court ruling
in
Citizens United v. Federal Election Commission—still seems rare six years later, at least in terms of contributions officially disclosed
to the FEC.

Only a few companies have provided FEC-reported contributions to super political action
committees, led this year by $3 million that Chevron Corp. contributed to super PACs
linked to Republican House and Senate leaders. Other public corporations contributing
to Republican super PACs have included Altria Client Services LLC, Devon Energy Production
Co. and Duke Energy, which have given a combined amount of just over $1 million this
year.

But, an escalating feud over disclosure of corporate campaign money issues has made
it clear that a few million dollars in disclosed super PAC contributions are not all
that's at stake. More important is the money companies are being asked to give to
politically active trade associations and nonprofit groups, which don't disclose their
donors and are spending tens of millions to influence key federal and state elections.

Such groups have spent at least $80 million this year in what critics call “dark money”—campaign
spending by organizations that keep their donors secret. That's according to FEC reports
on campaign spending by nondisclosing groups analyzed by the nonprofit Center for
Responsive Politics. Additional millions also have been spent in federal and state
races without any FEC reporting, according to analysts.

Exactly how much dark money has been spent and how much of it is corporate money remain
unknown because of gaps in current disclosure rules. But, corporate money is widely
believed to be a large portion of total undisclosed contributions for one obvious
reason: well-known, publicly traded companies, unlike Chevron and a few others, usually
don't like to have their names associated with political contributions.

‘Companies Prefer Anonymity.'

“Companies really prefer anonymity”
in political giving, according to Bruce Freed, the president of the nonprofit Center
for Political Accountability (CPA).

Freed's organization has crusaded for several years to turn around corporate attitudes
and convince companies to operate in the daylight. The group has been criticized by
supporters of corporate political involvement, who say it is aligned with unions and
Democrats, while most corporate money favors Republicans.

That's a charge Freed denied. He told Bloomberg BNA in a phone interview that his
organization gets no money from unions and is nonpartisan. He acknowledged, however,
that public companies often face pressure for greater disclosure due to shareholder
resolutions, including efforts backed by unions and liberal groups.

While CPA has no direct ties to the Democratic Party, Karl Sandstrom, CPA's counsel,
is a former Democratic FEC commissioner now in private law practice with the with
the firm Perkins Coie, which has many Democratic clients.

Despite such ties, Freed said CPA tries to work with companies, rather than criticizing
them. He said the organization simply advises that companies should have established
policies in place to govern their political giving, and these policies should include
voluntary public disclosure of election-related contributions and payments. Freed
said his group has talked directly with officials from over 100 top companies.

“If a company asks, ‘Are you telling us not to give?' we say no,” he said.

Freed acknowledged that companies can use disclosure policies as a shield against
possible “extortion” by campaign spending groups linked to political leaders. He added
that CPA also tells companies, if they decide to give to nondisclosing groups, it's
better to have a voluntary disclosure policy in place up front because “your anonymity
can never really be guaranteed.”

More Companies Voluntarily Disclose

More and more companies are listening to this advice, according to CPA. With Congress
and Federal Election Commission regulators gridlocked over requiring greater disclosure
of campaign money, companies increasingly are creating their own disclosure policies,
according to the group's latest annual index surveying disclosure policies of the
S&P 500 top U.S. companies.

Known as the
CPA-Zicklin Index, the survey was created by Freed's group and the Carol and Lawrence Zicklin Center
for Business Ethics Research at the University of Pennsylvania's Wharton School of
Business.

Key findings of the 2016 index included:

Corporations placing in the top rank of voluntary disclosure policies increased by
over 50 percent—from 23 to 35 companies.

More than a dozen companies improved their disclosure scores by 50 percentage points
or more.

More companies are addressing questions about dark money by strengthening or adopting
policies on or disclosure of trade association payments and contributions to Section
501(c)(4) “social welfare” organizations.

“Indisputably, a voluntary trend toward greater sunlight, board oversight and restrictions
on political spending continues” among the top publicly traded companies, according
to the CPA-Zicklin Index's executive summary.

Yet, with no legal standard for disclosure, companies still are all over the map in
terms of what types of spending and how much they choose to reveal. While nearly nine
out of 10 companies included in the index at least had adopted a corporate policy
governing political spending, details of these policies varied widely.

For example, fewer than half of top companies provided any information at all about
their payments to trade associations, such as the U.S. Chamber of Commerce and others.
Meanwhile, fewer than a third of companies revealed contributions to other nonprofit
groups, including 501(c)(4) groups spending money to influence campaigns.

Some Don't Play

The CPA-Zicklin Index revealed that many of the companies it ranked highest in terms
of disclosure have policies restricting corporate involvement in providing money related
to election campaigns.

While only 39 companies had policies to disclose payments to both nonprofit groups
and trade associations, 53 companies said they had policies to restrict the use of
any payments to outside groups, such as prohibiting their money from being used to
pay for campaign ads. This latter number, which was up from 40 companies in 2015,
included eight companies that said they do not spend any money from their corporate
treasuries to influence elections and have asked trade associations not to use their
payments for political purposes.

This handful of big companies has sworn off campaign-related giving altogether, but
the growing trend toward voluntary corporate disclosure is seen by some as an effort
make all corporate campaign money taboo.

The most vocal critics in this regard include the Chamber of Commerce, the nation's
largest business lobby, which jealously guards the funders of its tens of millions
in political spending. Also criticizing the push for disclosure is the nonprofit Center
for Competitive Politics, which views campaign finance regulation as an impediment
to free speech.

Suppressing Speech?

“The CPA-Zicklin Index, and its supporters, are not concerned with good corporate
practices,” said a
blog post from CCP President Brad Smith, a former Republican FEC commissioner. “They support
policies cleverly designed to suppress the speech of businesses.”

Smith noted that the forward to the latest CPA-Zicklin Index included a quote from
Charles Kolb, a former White House official in the George H.W. Bush administration
and former head of Committee for Economic Development, who highlighted companies'
increasing voluntary restrictions on their corporate spending.

Smith said, “To the publishers of the Index, corporate silence is just as good as
corporate ‘transparency.’”
He added that the survey emphasized political outcomes, such as diminishing “crony
capitalism,” rather than increased shareholder value, “as the reason these trends
are worth celebrating.”

“If the Center for Political Accountability and the Zicklin Center want to speak loudly
in support of the policies they prefer, the Center for Competitive Politics fully
supports their efforts,” Smith said. “Unfortunately, they’ve chosen to shut down debate
by shaming companies into abstaining from supporting the causes they believe in. This
shame game is bad for business, but much more importantly, it’s bad for the public
who wants and deserves to hear from all sides in policy debates.”

To contact the reporter on this story: Kenneth P. Doyle in Washington at
kdoyle@bna.com

To contact the editor responsible for this story: Heather Rothman at
hrothman@bna.com

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